NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Ethical Issues
Which practice by an investment adviser is an example of maintaining client confidentiality?
Maintaining confidentiality means using client data only for providing advice and disclosing it to others only with the client's consent or when the law requires it. Sharing details with friends, publicising identifiable stories, or giving data for referral fees breaches this duty.
- ASharing a client's portfolio details with a friend who is also an adviser for feedback
- BUsing a client's financial data only for providing advice, and disclosing it to others only with consent or where legally requiredCorrect
- CPosting anonymous-looking but identifiable client success stories on social media
- DGiving client details to a product manufacturer to earn a referral fee
Explanation
Client information must be used only for the advisory purpose and disclosed only with client consent or when required by law. Sharing with friends, advertising identifiable stories or selling data for referral fees breaches confidentiality.
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